Compulsory Licences Needed For Affordable Hepatitis C Innovative Drug Regimens

Compulsory licences should be issued to roll out generic versions of innovative HCV drugs. Only generic competition can push down the extortionate prices of these lifesaving medicines, while placing equitable access and public interest before monopolistic pharma companies’€™ business strategies

Compulsory Licences Needed For Affordable Hepatitis C Innovative Drug Regimens

by  Daniele Dionisio

Member, European Parliament Working Group on Innovation, Access to Medicines and Poverty-Related Diseases

A leading cause of liver cancer and cirrhosis, infection by hepatitis C virus (HCV) affects at least 185 million people worldwide, 85% of whom live in low (13%)- and middle (72%)-income countries. Around 15% of Egypt’€™s population, for example, is infected -the world’€™s highest prevalence – while it is estimated that 12 million people in India have hepatitis C.

 Nearly 350,000 people are killed by hepatitis C yearly, where  preventive vaccines are lacking.

And this occurs at a time when at least 1.2 million people in Japan and three million Americans suffer from hepatitis C, while the infection is a major European public-health challenge (between 0.4% and 3.5% of the population in different EU Member States) as the most common single cause of liver transplantation.

Up to last year, the success rate of available treatments was poor, with a ribavirin-interferon combination being effective in less than 50% of patients after a year (while being fraught with important side effects), and directly acting newer drugs not exceeding 75% sustained response without fully eliminating the need for ribavirin-interferon therapy.

But in recent months innovative medicines have been approved that can cure most HCV infections and do not require interferon in many cases. By directly blocking essential steps for HCV to replicate, they have shown convincing efficacy, mainly when used in combination (functional cure rates in excess of 90% after 12 week treatment), with a good safety profile. These medicines include Bristol-Myers Squibb daclatasvir(Daklinza®), Gilead sofosbuvir (Sovaldi®), Janssen simeprevir (Olysio®), and Bristol-Myers Squibb asunaprevir (Sunvepra®).

And new entries are expected soon, now that big companies are increasingly engaged in bids and acquisition deals to procure new components for more effective, powerful combination regimens. As an example,  Merck will buy the biotechnology company Idenix Pharmaceuticals for $3.85 billion, aiming, as reported, to add a drug from Idenix to its own combination of two agents and develop a once-a-day pill for all C virus subtypes in as little as four week treatment.

Needless to say, the high prices the companies are paying for such endeavors will eventually be over-rewarded by the billions of dollars in annual sales a successful drug regimen could secure. Purportedly , Sovaldi® already helped Gilead rake in, since its debut last December, about $2.3 billion in the first three months of this year, in compensation of $11 billion the company spent  in 2011 to obtain the rights tosofosbuvir through its acquisition of Pharmasset.

Good news for big pharma profits, these circumstances turn into bad news when it comes to prices the manufacturers apply for a 12-week course of each breakthrough regimen. Nothing less than scandalous,estimated prices, averaging from $133,000 to $200,000 for a two-drug new combination regimen (against trifling production costs!), definitely impair affordability and put these drugs beyond the grasp of most of the 90% of hepatitis C patients in low- and middle-income countries where a 12-week course of treatment should cost no more than $500, as firmly believed by Médecins Sans Frontières.

What’€™s more, following inclusion of these drugs in April 2014 WHO treatment guidelines for hepatitis C virus, the cost issue has become all the more critical for national budgets in the resource-limited and affluent countries as well.

As such, it comes as no surprise that, according to allowances in India’€™s Patent Law as regards lack of real innovation, oppositions  were recently filed with the competent authority in India against granting  Sovaldi®  a patent.

As an effect of the mounting pressure against prices out-of-reach for national health insurances, big pharma has begun negotiating bilateral agreements and voluntary licence (VL) deals with country governments and generic manufacturers. In the Gilead cases with Egypt and India, Sovaldi® has been priced at $900 for a 12-week course, and negotiations are in progress with Indian manufacturers to produce generic sofosbuvir.

Unfortunately, as reported, while the price agreed with Egypt would rank beyond the reach of the domestic health budget, voluntary licence negotiations with India are feared to exclude export to many middle-income countries with high HCV burden.

Likely, this is not happening by chance at a time when international donors are cutting support to middle-income economies and the brand industry is eagerly looking to the fast-growing markets where a number of well-off elites, who can afford out-of-pocket spending (at least 300 million people in India, 800 million in China), now live.

Admittedly, although VLs, as part of the flexibilities laid down in the World Trade Organization TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement, do include permission for export, a number of constraints limit this model basically because the originators actually hold control over the whole manufacturing, distribution and pricing chain of steps: an unbalanced mechanism.

On the contrary, unrestrained competition by compulsory licences (CLs), another flexibility provision in TRIPS, would be a far better mechanism for maximizing the affordability by allowing “…someone else to produce the patented product or use the patented process without the consent of the patent holder”€. 

This would also be the case for an allowance for export agreed upon through a 2003 WTO waiver (the “€œAugust 30th Decision”€) that permits export under CLs to countries unable to manufacture key medicines themselves.

On these grounds, compulsory licences should be issued at once to roll out generic versions of innovative HCV drugs. Only generic competition would be up to pushing down the extortionate prices of these lifesaving medicines, while making equitable access and public interest overcome monopolistic pharma companies’€™ business strategies.

To the point, cheap generic versions of state-of-the-art HCV drugs would reasonably be within reach. Relevantly, published data this year argue that generic-drug makers would be able to roll out these medicines at $100-€“250 for a 12-week course.

Overall, these considerations align with a resolution on hepatitis unanimously adopted by Member States at WHO General Assembly in May.

Among others, the resolution urges Member States …(12) to consider, as necessary, national legislative mechanisms for the use of the flexibilities contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights in order to promote access to specific pharmaceutical products;…

The resolution also requests the Director General  (9) to support Member States with technical assistance in the use of trade-related aspects of intellectual property rights (TRIPS) flexibilities when needed, in accordance with the global strategy and plan of action on public health, innovation and intellectual property;…



*Article republished from Intellectual Property Watch August 5, 2014  

Daniele Dionisio is a member of the European Parliament Working Group on Innovation, Access to Medicines and Poverty-Related Diseases. He is an advisor for “€œMedicines for the Developing Countries”€ for the Italian Society for Infectious and Tropical Diseases (SIMIT), and former director of the Infectious Disease Division at the Pistoia City Hospital (Italy). He may be reached at